The final 717 makes its way this month through preliminary production,
en route to completion in May 2006. But if not for unconventional action
at the program's outset, the economical airplane might never have been.
With steadfast resolve, the 717 team twice reinvented its business model—and
the results just might look familiar.

Current demand for jets in the 100-seat category won't support continued
production, but the airplane has been highly profitable for its operators.
Developed by McDonnell Douglas as the MD-95 and renamed 717 after the
merger with Boeing in 1997, the airplane was a low-cost concept modeled
after the company's successful DC-9.

Back in 1994, at the program's outset, the market forecast for 100-seaters
looked encouraging. Yet no matter how leaders crunched the numbers, there
simply was no profitable way to launch and maintain an airplane program
following a blueprint from the past. The team needed to change its approach—and
do it quickly.

The program looked first to supplier relationships. At the time, the
majority of the airplane was produced in-house and the rest of the work
subcontracted. However, the team recognized that a new approach with
suppliers could forge a unique and mutually beneficial partnership and
drastically reduce costs.

"We started a concept in which we gave more work to the suppliers
and had them take more risk up front," said Pat McKenna, 717 vice
president and general manager. "In return, we involved them more
in managing and developing the program."

Today, partnering with global suppliers and sharing development risk
is seen throughout Boeing Commercial Airplanes, most notably on the revolutionary
787.

With supplier partners on board, the 717 program launched in 1995. The
717 made its first flight in September 1998, and by the first delivery
a year later, the program had accumulated almost 100 orders.

Yet questions lingered about the program's future. In the years after
Boeing and McDonnell Douglas merged, customers and investors were uncertain
whether the airplane would fit into the company's product family. Boeing
decided that the burgeoning program had a lot of potential, but something
more needed to be done to obtain a reasonable return on investment. The
717 team again looked to overhaul its approach.

In 1999, the program launched the Strategic Business Transformation.
This initiative touched all aspects of the 717 business, with a determined
focus to drive out costs. The team consolidated manufacturing into a
single factory that significantly improved efficiency. Other Boeing programs
have since followed this tactic—most notably, the 737 "Move
to the Lake" factory consolidation in Renton, Wash.

One of the most dramatic changes the 717 instituted—and introduced
to Commercial Airplanes—was the moving assembly line. Manually
repositioning airplanes between production stations was time-consuming
and expensive. The moving line, where mechanics work from a set production
station, resulted in continuous one-piece flow throughout the factory.

"It wasn't perfect," said Bob Stanger, director of 717 Manufacturing. "Nobody
had ever successfully implemented a moving line for commercial airplanes
before, but we did a lot of things right." And, true to its goal,
the program began to realize savings attributed to the moving line.

In its quest to work smarter, the 717 program also added measures to
facilitate employee involvement. Integrated Production Teams, featuring
people from numerous disciplines such as Production and Finance, played
an integral part in the factory reorganization. These IPTs collocated
key organizations in the factory building so everyone could work together
more closely.

The 717 program's numerous departures from tradition have been incorporated
into other Commercial Airplanes production lines. It achieved breakthrough
cost reduction, not just incremental improvement. But perhaps more important
is the change in thinking that allowed its existence.

"We have grown a mindset in all members of our team that continuous
improvement and doing things differently is not only OK, but the key to
Boeing's long-term success," McKenna said.